Wall Street Has It All Wrong on Alphabet, Hints Analyst

Shares of Alphabet (GOOGL) fell 0.8% to $960.18 on Thursday following a downgrade of the stock at Canaccord Genuity to "Hold" from "Buy" with a $1,000 price target.

"We think much of the growth over the past two years is due to ad load increases on mobile search and YouTube, which (especially the former) will be hard to repeat," Canaccord analyst Michael Graham contended.

He explained that when implementing his detailed segment analysis, it strongly suggests that consensus gross margins projections are too lofty, and although revenue growth should offset that, Graham thinks it will limit the potential for upward EPS revisions.

Further, "GOOGL's P/E multiple of ~24x is expensive by historical standards, and puts the stock within a pitching wedge of our $1,000 price target," he added.

What's Hot on TheStreet

Beware Tesla fanboys: Tesla (TSLA) burning money, but shareholders are the likely ones to blister and feel the pain. The standard 90-day corporate equity lockup period for Tesla, following its $402.5 million stock sale of March 16, ends Thursday TheStreetreports. As a result, Tesla will be free to conduct another stock offering as soon as Thursday, which is a real possibility given the electric car company's debt situation, partly due to its Solar City investment, and need for additional cash. Any new issuance the company may seek would likely need to take place before July, which is when Tesla issues its quarterly report on car sales. Alternatively, an offering could come in late August after Tesla issues its quarterly financial report.

Amazon eyes a new prize: Amazon (AMZN) may be preparing a deal to buy Slack Technologies in a deal that could value the messaging startup group at more than $9 billion, TheStreetpoints out. With Microsoft's (MSFT) deal for LinkedIn being well-received, this deal seems logical for an Amazon that is aggressively expanding into the cloud.

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